"It is vitally important for investors to reduce, where possible and legal, investment-related fees and taxes. Those who don't might wind up taking all the risk and getting very little in the way of real returns." [video]

"My main beef isn't with Apple but with the Dow itself. While I don't want to see the average fade away entirely, it should be retired and replaced with a more diversified index such as the S&P 500 for most purposes."

"It's worked well so far because the Stingy Stocks have gained 15.2% per year on average since 2001. By way of comparison, the S&P500 (as represented by the SPYETF) advanced only 6.5% a year over the same period. The Stingy Stocks bested the index by an average of 8.7 percentage points a year."

I was very pleased to give a talk to the friendly folk at a Canadian MoneySaver conference this weekend. Here's a copy of the slides that were used. (I'd also like to thank everyone who gave me feedback on them!)

"Value investors are thinking about lives well lived this week. They're looking forward to reading what Warren Buffett and Charlie Munger have to say about Berkshire Hathaway's next 50 years. At the same time, they're celebrating the life of Irving Kahn who gave Methuselah a run for his money."

"Value investors like to buy discounted stocks and they spend their days rooting through the market's half-off bin. But they have to be wary because, much like dollar-store specials, the bargains can be illusory."

"The lesson here is that active investors should be mindful of the costs they face. I'm not saying they should give up on stock picking and buy indexes instead. (Mind you, that would be a good option for many investors.) I am saying that it's important for all investors to try to reduce investment fees and costs where possible."

"It's belt tightening time for those facing mountains of unpaid holiday bills. But MoneySense readers often suffer from the opposite problem. That is, they save too much. They're part of a merry band of frugal folk who have bulging banks accounts. Some of them even have more money than they're likely to spend in several lifetimes. The super savers should resolve to ramp up their spending."

"If you're just getting into the markets then it's best to test the water by putting a small amount of money into a balanced fund. If the ride proves to be too wild then it's an easy matter to lean more heavily on bonds and GICs. Alternately, those who don't mind the ups and downs might tilt their portfolios a little more heavily to stocks. Either way, it's a valuable lesson to learn before putting a large amount of money at risk."

"As winter descends on Canada, the good people of Alberta face bitter prospects. Matters are so frosty that provincial politicians are climbing into bed with one another in an effort to warm up before the party stops."

"Getting a good education opens up many doors. But even after years of schooling, too many people know little about the financial markets and investing, which is a real shame. Money manager Patrick O'Shaughnessy hopes to bridge the gap with a new book called Millennial Money: How Young Investors Can Build a Fortune. In it, he encourages young adults to invest in the stock market to take full advantage of the magic of compounding."

"The point being that index investors (and mutual fund investors) only see the overall return, less fund fees and other frictions. They get to eat their returns while being blissfully unaware of what goes into them. Those who invest in stocks directly have to be prepared to see how the return sausage gets made. Good investors can resist becoming overly alarmed when stocks jump around wildly. The best focus on the overall results instead."

"Melding value investing with momentum investing tends to be particularly powerful. In this case, think of value investing as the meat and potatoes of portfolio construction. The idea is to stick to good companies at reasonable prices. Momentum investing represents the horseradish because it favours hot stocks that are expected to move even higher."

"Our annual All-Star stock picks, which combine the best growth and value characteristics, have climbed by an average of 17.3% a year since we started 10 years ago. That assumes an equal dollar amount was put into each All-Star stock in the first year and rolled into the new All-Stars each year thereafter. By way of comparison, the S&P/TSX Composite (as represented by the XIC ETF) advanced by just 5.3% annually over the same period. The All-Stars beat the market by an average of 12.0 percentage points per year over the last decade."

"Today I'll focus on cloning smart investors like Warren Buffett. I'm not talking about brewing up mini-Buffetts in some sort of nefarious genetic experiment, but simply copying the portfolios of the best investors in the world. The idea is to ride the coattails of their expertise - without having to pay for it."

"Warren Buffett bought a basket of cheap South Korean stocks about a decade ago. In doing so, he put the country on the map for North American value investors and a few of them have followed his lead."

"If you're a value investor or are simply interested the sort of thinking behind Mr. Icahn's latest round of activism, then you'd do well to pick up a copy of Deep Value. It'll help you become a better investor."

"Deep value investing is a powerful way to beat the market, but deep value stocks are an endangered species in the U.S., according to money manager Patrick O'Shaughnessy. The situation north of the border is similar. But, thankfully, there are still some bargains to be found."

"My last post was devoted to dividend stocks with pep, which highlighted dividend payers that have outperformed over the last year. Such stocks are said to have positive momentum. But momentum works both ways. On the plus side, studies have shown that top performers usually go on to do well. On the other hand, stocks that have trailed the market often continue to slide."

"There is no shame in admitting that you're not the next Warren Buffett. The vast majority of investors aren't. Those who figure it out are likely to improve their returns dramatically by following simple low-cost mechanical methods such as investing in low-fee index funds."

"Near the depths of the Great Depression, Mr. Graham wrote a series of articles that highlighted businesses that could be snapped up for less than their liquidation value. The outlook was so bleak for these firms that the market believed they were better off dead than alive. Anyone who was brave enough to buy a basket of them, and hold on, did very well indeed."

"Dividend investors are particularly fond of companies that grow their dividends. If you talk to old hands, you'll probably hear about stocks they bought years ago that now pay giant dividends. But you can't blame them. After all, there's something special about owing a stock that pays more in dividends than it cost in the first place."

"We're thrilled to report our efforts have paid off handsomely since last time. Our All-Star stocks, which combine the best growth and value characteristics, gained an average of 55.0% since last year. By way of comparison the Canadian market, as represented by the S&P/TSX Composite ETF (XIC), gained 7.2% over the same period."

"Last year's All-Star stocks turned out to be great buys, gaining an average 38.7%. In comparison, the U.S. stock market, represented by the S&P 500 (SPY), climbed only 23.3% since last time. The U.S. All-Stars beat the market by 15.4 percentage points, not including dividends."

"It's hard to visit cottage country without dreaming about buying a little slice of heaven. While owning a cottage has some obvious benefits, it tends to be a costly affair. Crunch the numbers and you'll likely discover the relative advantages of renting."

"Index investors are partying like it's 1999. The bull market is giving them reason to cheer, and fund companies are slashing their fees. It's now easy to build a portfolio stuffed full of dirt-cheap exchange traded funds."

"Welcome to the inaugural edition of the Value Hunter investment blog at MoneySense.ca. The focus of this blog will be on dividend investing and other conservative stock strategies. I hope it will help you become a better investor."

"Thirty-one of the 60 stocks passed Mr. Graham's test at the end of 2008 when the financial system was in acute distress. But that number has been getting smaller and smaller ever since. This week, only six stocks passed the test."

"Investors routinely face information overload. It's easy to find hundreds, or even thousands, of data points on stocks with just a few clicks of the mouse. Only a small amount of which is actually useful."

"Following the 4-per-cent rule is sure to lead to a happy retirement. That's how much an investor can extract from a balanced portfolio when they retire without having to worry about running out of cash before running out of time. At least, that's the theory."

"Our propensity to spot patterns in almost anything is one reason why I give short shrift to technical analysis. But the surprising universality and persistence of momentum investing is winning me over."

"The tulips are in bloom in Toronto and the entire front yard of a house on my street is devoted to them. The flowers were originally planted by the owner's parents who passed away some time ago. But their memory lingers in the glorious blanket of red and yellow that appears each spring. As it happens, tulips and stocks have a sordid history that dates back to the 1600s, when the Dutch were afflicted by tulip mania."

"The problem is, most index funds are too active. Sure, specialty index funds must trade stocks frequently in an effort to track small segments of the market. But some of the biggest and most beloved indexes trade too often."

"Flint knapping was an important skill many years ago and then technological change made it obsolete. But, in a strange twist of fate, it has been making a bit of a comeback thanks to the Internet. It's now easy to learn how to knock out an arrow tip the old-fashioned way. While the Internet is a great boon to hobbies such as flint knapping, it's knocking the stuffing out of some businesses. Newspapers are a case in point."

"Value investors are set to descend upon Toronto for the Fairfax Financial annual meeting. They're making the trip from all over the world to hear Prem Watsa, the firm's CEO, talk about strategy and investing in early April."

"My biggest worry is related to the firm's size. Berkshire Hathaway is the fifth-largest stock in the U.S. by market capitalization and the fourth-largest by revenue, according to S&P Capital IQ. Problem is, it is extraordinarily difficult for giant companies to grow at above average rates for a long time."

"The stock market regularly makes a mockery of reasonable strategies and smashes them to pieces like a deranged bull rampaging through a china shop. Its latest victim is the idea that investors should invest heavily in stocks when they're young and then gradually move into bonds as they prepare for retirement."

"When you think about the sort of people who grow up and go into the investment business, you might imagine characters such as Alex Keaton from the 1980s TV series Family Ties. Michael J. Fox brought the role to life and played a straight-laced conservative kid who was a little too obsessed with money. But it's best to ignore such stereotypes, because more artistic souls can also become great investors, and Benj Gallander is a prime example."

"Over the last year the Stingy Stocks have climbed by an average of 37.8% while the S&P500 (as represented by the SPY exchange traded fund) advanced only 29.7%. Both fared well but the market trailed by 8.1 percentage points."

"When it comes to the stock market, glamour stocks are much like marshmallows. They're exciting, fired with rosy growth prospects, and offer the dream of riches. While they might provide a speculative sugar rush, their long-term prospects tend to be quite poor."

"Focusing solely on the winners can lead to a dangerously skewed view of the world. It's a particularly acute problem in the markets, where luck often plays an important role. Problem is, the market tends to bury its failures, which slip out of both sight and mind. Investors who don't account for them may find their decisions swayed by survivorship bias. It's a factor that fund investors should be particularly wary of."

"New investors should think seriously about opting for low-fee balanced funds like those offered by Mawer, Steadyhand, and PH&N. They represent good picks for active investors. Regrettably, there are relatively few balanced options that are worth recommending to index investors."

"The investing world is awash in simple mechanical strategies that promise prosperity. But they all suffer from a fundamental problem: They're well suited to robots, but humans control the cash. Finding a sound strategy is less than half the challenge for most people. If they can't stick with it, then it's not very useful."

"Thrift is a rare virtue in the investment world, and it tends to go unheralded. Instead, hordes of salespeople try to lure in investors with the possibility of big returns, while charging a pretty penny. But you don't have to pay up. I'll walk you through three ways to benefit from the wisdom of the best investors in the world without paying a fortune."

"The idea is to choose one of the bank stocks to sell and one to buy. After making the choice, the fantasy portfolio will start 2014 with $20,000 in your favourite stock, nothing in the one you want to avoid, and $10,000 in each of the remaining four." [Enter over in the G&M comments section]

"A sleigh full of holiday cheer was brought to a West Coast pancake house this month. The well-aged regulars were treated to flapjacks by an anonymous benefactor who picked up the tab. He had the staff wish them a merry Christmas and asked if they could pay it forward."

"When it comes to stocks, I take a different tack and look for the long-term losers. It might seem counter intuitive, but such stocks tend to be inexpensive based on various measures of financial merit and they've had time to make improvements. Both factors are positives."

"Finding the right Christmas gift can be difficult and some people are particularly hard to shop for. The combination can, on occasion, make the holiday season feel like an exercise in passing the proverbial brown sweater back and forth. Investors suffer from a similar problem when looking for good stocks. But, in some ways, they have it even worse because they have to wait for months, if not years, before finding out whether their picks turn out to be duds or stars."

"Many people go to New York to try to make a fortune on Wall Street. But value investors often thrive in smaller cities, where they're insulated from the groupthink that can infect those in the big city."

"As a buyer of stocks, my preference is clear. I would like to buy stocks at more reasonable valuation, which should enable them to achieve good returns in the years ahead. That means I would prefer to see the market come crashing back down to earth sooner rather than later - provided it doesn't cause too much collateral damage along the way."

"The riders careened down narrow paths while desperately trying to avoid an overly intimate encounter with the surrounding trees. Those with a sharp eye might have spotted money manager David McLean cruising by."

"Problem is, even the most strident index investors I know have a tendency to say one thing and to do another. None of them strictly follow what I would call a pure approach to passive investing. Instead, they tend to slip back into some old habits."

"Holding a concentrated portfolio that contains only a few stocks is a two-edged sword. If you pick the right stocks, they can pay off in spades. But if you don't, you might be taken to the poorhouse."

"To obtain a well-rounded portfolio, dividend investors should pick up at least a few international stocks. That's why I'm on the hunt today for U.S. dividend payers that might also appeal to value investors."

"As the weather gets colder and I get older, I've begun to enjoy the comfort provided by a warm bowl of soup. There's nothing like a delicious mix of vegetables and chicken to ward off the chill in the air. As I sat down to my first bowl of the season my thoughts turned to how I might pay for my humble repast for years to come. A few good dividend stocks might do the trick."

"But the idea that stocks might also have a natural rhythm is a little more controversial. It's obvious that the market isn't perfectly correlated with the seasons, but research points to a weak relationship between the two that some investors might want to try exploiting."

"While balanced funds aren't a cure-all for the ails of market timing, they do represent a useful tool for new investors and for those who get a little jittery in downturns. When shopping for balanced funds it is important to keep a close eye on the fees they charge. All too many funds offered to Canadians charge outrageously high fees."

"The idea of using long-term earnings when evaluating companies is hardly a new one. Benjamin Graham, the father of value investing and a highly successful money manager in his own right, suggested employing a similar technique when studying individual companies."

"Enterprise value has one peculiarity that market capitalization does not. It's possible for a company to have a negative enterprise value. That might sound odd at first but remember the calculation subtracts a firm's cash from the market value of its equity and debt."

"The lesson here is to try to minimize your costs and employ sensible tax planning methods. While a 2-per-cent annual fee might not seem like much, it can really add up over time. Throw in a performance fee on top, as most hedge funds do, and the costs skyrocket." [Btw, the calculations included a high-water mark]

"I have a soft spot for Mr. Tobik's value investing philosophy. But, much like a slice of Roquefort cheese, the tiny firms he favours aren't for everyone. If you're looking for a bit of extra flavour to determine whether these firms might suit your own palate, check out what his site has to offer."

"Even a little bad news has the potential to go a long way. Should rising interest rates slow the economy down, it's fairly easy to envision the possibility of much lower stock prices and more than a few dividend cuts along the way."

"It's rare to find ancient structures that have stood the test of time. But those that survive hold lessons for the modern world. One of those lessons was recently learned by researchers at the Lawrence Berkeley National Laboratory who cracked the puzzle behind Roman concrete. When used to build ports, the ancient stuff significantly outlasts the common version, which can handle only a few decades in the waves."

"Liquidity sounds like something an investor might need after a bad day in the market. But when it comes to stocks, a highly liquid approach is not the way to go. Instead, teetotallers are more likely to outperform."

"Short term results are one thing but the All-Stars really shine over the long-term. If you had bought equal amounts of the All-Stars and rolled your gains into the new stocks each year, you'd have enjoyed 15.2% average annual returns over the last eight years. By way of comparison, the S&P/TSX Composite (XIC) only climbed 4.5% a year over the same period. The All-Stars outperformed by an average of 10.7 percentage points a year."

"Canadian stocks have many fine qualities but are far less numerous than their U.S. counterparts. It's only natural to look across the border for bargains to round out a diversified portfolio. That's why we extended the Top 200 methodology stateside and are pleased to present this year's MoneySense Top 500 guide to U.S. stocks."

"I have a soft spot for old Westerns, the type where it's easy to tell the villains and heroes apart - largely because the bad guys are framed in posters proclaiming they're wanted either dead or alive. When it comes to stocks, is it possible to want them dead or alive? It might be, provided they have enough assets that can be liquidated at a profit. In such cases, investors stand to make money if a firm goes bankrupt, but can also do very well should it turn around and thrive."

"I believe that value comes first. Despite their apparent ugliness, bargain stocks do quite well, as a group, due to their low prices. But some of them deserve to trade for even less. That's why many value investors look at business quality in an effort to find stocks that are both cheap and relatively safe."

"Perusing the list of stocks hitting their 52-week lows inspires a little ditty called Down, Down, To Goblin Town to play in my head. It's the victory song of a horde of goblins in the 1977 animated version of The Hobbit, and they sing it while dragging the heroes down into the bowels of their dark lair. It neatly captures the dangers investors face when buying falling stocks."

"Some index investors have suggested that expensive portfolio managers could easily be replaced by monkeys willing to work for bananas. Now a recent study goes even further. It suggests that a chimp can outperform not just the typical money manager but the traditional index fund as well."

"Investors are often advised to buy low and sell high. But such advice has an under-appreciated corollary: They also have to be prepared to weather the bad times. All too many people crumble in the face of adversity and simply don't have any money left to buy when prices are low."

"Developing a good checklist is well worth the effort and it can save you from running aground when using stock screens. Both work well together and they allow investors to follow a consistent, well reasoned, and systematic approach. If checklists can improve the results of pilots and surgeons, they should also be able to help you become a better investor."

"There are strange things done in the midnight sun by the men who moil for gold. Stranger still than the events in Robert Service's poem are the sights to be seen when screening for stocks. They might not be as bloodcurdling as witnessing the cremation of Sam McGee, but simple stock screens can lead you to infernal stocks."

"Even low-fee tax-optimized balanced portfolios face difficulties today because the yield on Canadian bonds is very low. To get a real return of 5 per cent on an equally mixed stock and bond portfolio you'd need to see stocks gain more than 9 per cent a year, which seems unlikely at this point. Because most people wind up in reasonably balanced portfolios, it's more critical than ever to avoid high fees. Unless, of course, they're keen on the Freedom 75 plan."

"Two-for-one sales can inspire mixed feelings in the aisles of the grocery store. While I love big discounts, I have a hard time accommodating an extra bag of potato chips. But I never get my fill of bargain stocks and the market is now offering a rare three-for-one deal on U.S. bank stocks."

"Like avid gardeners, conservative investors want their stock dividends to grow. They aren't in it for a quick trade and, instead, follow a slower steadier method that requires only a little weeding and pruning from time to time. It's an approach that has allowed more than a few investors to enjoy a comfortable retirement."

"Warren Buffett is one of the best investors of our age and his extraordinary record spans many decades. Such is his renown as both an investor and businessman that even presidents seek his advice on economic matters. But Buffett isn't shy about sharing the factors behind his investment success."

"In this case, the takeover price of $13.65 per share is rather parsimonious. Indeed, it has raised the ire of the smart folk at Southeastern Asset Management who believe Dell is worth much more. Their reasoning is worth reading because it shows, at least in part, how they go about valuing stocks."

"Spartan accommodations are one reason I became interested in a stock owned by money manager Tim McElvaine. He quipped that he felt the need to get a tetanus shot before visiting the aging headquarters of the company"

"A peculiar investment trust put the buy-and-hold experiment into practice many years ago. The trust takes passivity to such an extreme that it makes many index investors look like a bunch of drunken day-traders."

"Cheap and safe are two attributes I look for when picking stocks. But seeking safety doesn't always pay. History suggests that a cheap-and-scary approach may be the better way to go - if you have the stomach for it."

"While the return potential of small value stocks is well known, the benefits of low liquidity may be less obvious. That's why I was pleased to read a study on the topic by Roger Ibbotson, and others, in the latest Financial Analysts Journal, which dissects mutual funds."

"Next time you're in the bathtub, consider the dynamics of the rubber duck - an easy-to-submerge toy that quickly pops to the surface when it is released. In much the same way, value investors buy stocks that the market has pushed deep underwater because they expect these firms to turn around and head back to more normal levels."

"Rather than look for stocks at the extremes, I take a different tack. Instead of seeking the best, I endeavour to avoid the worst. It's like sculpting: I start with all the stocks on the Toronto Stock Exchange then slowly whittle down this long list through a series of relatively mild cuts."

"I'm a big fan of Benjamin Graham's investment techniques and frequently use strategies from the father of value investing to uncover interesting Canadian stocks. With markets looking a bit shaky in recent days, it's an opportune time to focus on Mr. Graham's defensive approach, which I've used profitably for over a decade"

"The market is 29 per cent higher than its average CAPE of 16.5, and 31 per cent higher than its average P/PeakE of 11.3. As a result, despite their differences, it turns out that both methods point to similar levels of overvaluation."

"Removing the most volatile stocks from the low-P/B portfolio boosted returns by nearly a percentage point annually and reduced volatility by almost two percentage points. As a result, value and low-volatility work well together."

"Combining a search for dividends with a nose for value often produces good results. But let's take a look at a few practical issues you might encounter when looking for stocks with this tempting combination of features."

"You don't need special sources of information or cutting-edge analysis to make money in the market. It helps, though, if you have patience and the willingness to buy stocks that other people despise. For proof, look to the career of Walter Schloss."

"When I explain the theory of value investing to people, they always love the idea. Everyone is excited by the notion of snapping up a dollar's worth of assets for 60 cents. Then they see an actual value portfolio. And they recoil in horror."

"Value investing is all about finding stocks (and other securities) that are both cheap and relatively safe. The two are intimately related because buying at a low price is inherently safer than buying at a high price, everything else being equal."

"A little more than a decade ago ETFs were rare things. The few that were available were much like the chocolate and vanilla of the investment world - plain but satisfying options. They tracked the big indexes and charged relatively low annual fees (MERs). If you pointed new investors to ETFs in those days, they would likely find reasonable funds on their own. But that was then."

"It is entirely possible for the market to trade at low ratios when rates are low. If anything the recent ratios have been high compared to past levels. If you just consider times when interest rates have dipped below 3 per cent, you'll find that Shiller's P/E has averaged 13.6. As a result, history provides even more meat for the bears because it bolsters their arguments that stocks are pricey."

"Fortunately, there is good news even during a rough patch like this. Lower prices can be an opportunity for bargain hunters. In fact, a bear market can be an excellent time to track down a few juicy dividend stocks while they're on sale."

"You should mentally prepare yourself for the overwhelming likelihood that, as a stock investor, your portfolio will see a great many bad days even if your long-term results are good. Indeed, you'll likely spend much of your life with a portfolio that has declined from its prior peak."

"Prem Watsa is worried about the stock market. In fact, the famed value investor and CEO of Fairfax Financial has hedged his company's stock portfolio against a market downturn. When an investor as successful as Mr. Watsa adopts such cautious measures, should ordinary investors follow his lead?"

"Many stock market indicators are about as useful as cracked crystal balls. But Robert Shiller, a professor of economics at Yale University, advocates one forecasting tool that has demonstrated a modicum of predictive power over the long term."

"Is purloining good ideas distasteful? U.S. fund manager Mohnish Pabrai doesn't think so. He says it's a great way to make money and urges people to copy notable investors more often. You might want to take a page out of his book and improve your portfolio. "

"Walking downstairs on Christmas day was a ceremonial affair when I was young. It started by lining up with my brother to descend to the living room in order from eldest to youngest. Aside from heightening the anticipation of good things to come, it allowed my parents to see our reactions to the Christmas tree, fire, presents, and perhaps most delightfully, the stockings stuffed to the brim with treats. The felling of delight I had when pawing through my treat-laden stocking is now, alas, a thing of the past. But these days I get the same sort of excitement when I look through the largest stocks in Canada for this year's MoneySense's Top 200 All-Stars. This year marks the eighth in a row for the Top 200 tradition which, I'm pleased to say, has been very fruitful."

"There are a few skills that every Canadian should pick up in childhood and skating is one of them. But no one tells you that it all slips away after spending years reading books and sipping hot chocolate by the fire. That's something I discovered the hard way when I recently squeezed my feet into a pair of skates and tottered out onto the cold hard ice of my local rink. The prospect of falling seemed far less painful when I was younger, slimmer, and closer to the ground. As a result, my first hobble around the rink was more a triumph of will than of good sense. Just as with learning how to skate, the first leap into the world of stocks can be an uncertain one. That's why - in an effort to help you gain your footing - we search high and low for the best stocks in the U.S. to put in the annual MoneySense Top 500."

"I'm a big fan of the British TV series Jeeves & Wooster, based on the comedic scribblings of P.G. Wodehouse. In the series a young Hugh Laurie (now better known as the acerbic Dr. House) plays the aristocratic and lovably foppish Bertie Wooster who must be regularly rescued by his clever servant Jeeves, played by an impish Stephen Fry. The show revolves around the bother caused by Bertie's newt-addled friends and unusually meddlesome aunts, who constantly interrupt his life of fun and leisure. But Bertie's carefree lifestyle is the product of inherited wealth and he would be in deep trouble without it. Such is the good fortune of the lucky sperm club. Alas, if you're like me, you weren't born with a silver spoon in your mouth and you have to worry about money. But fear not, there is hope for us common folk. A good dollop of thrift and hard work is all that's required to build up an income portfolio that can generate enough cash to support a comfortable retirement or life of leisure."

"The financial life of a prudent index investor is purposefully dull. You know the routine. Pick a balanced portfolio of basic low-fee funds and ETFs, rebalance occasionally, and hope to wake up comfortably rich one day. Where's the spark in that? Where's the pizzazz? Where are the piles of doubloons? To become stinking rich, you have to strap on the six shooters and shoot for higher targets."

"Standing in front of a giant glassed in freezer at the sweet shop in Tobermory, Ont., I was faced with a plethora of choices. Which sinful ice cream should I indulge in on a fine summer day? The selection of flavours, toppings, and cones was daunting. Thankfully, I had time to consider the fattening possibilities because the wee nippers in front of me were similarly perplexed. And, as important a choice as it may be, it was only ice cream. But when it comes to investing, the possibilities are vast once your portfolio grows beyond $100,000. Problem is, much like Bertie Bott's Every Flavour Beans (a devilish Harry Potter confection) the investing flavour you choose might wind up tasting like earwax. Alas!"

"Can you imagine anything better than studying calculus in the summer? I bet you can. But I found myself doing exactly that, late in my high school days, in a nerdy effort to graduate six months early. Aside from picking up an infinitesimal amount of calculus, I met a fellow keener in class who had the investing bug. He rattled on and on about odd things called mutual funds and how you could make a pot load of money from them. Naturally enough, I promptly forgot about funds for about a decade while exploring calculus a bit more. But I rediscovered them after I had amassed just over $10,000 by playing the part of Beaker to a series of loveable Dr. Honeydews in a variety of laboratories. At the time, I felt that $10,000 was a tidy sum for a young fellow. Not a fortune to be sure. But, just like today, more than a little walking around money. It was also enough to think about alternates to the old bank account and, after some pondering, I moved my grubstake into mutual funds. If only I knew then what I know now. But you can profit from my experience. Here's what I'd tell a younger me about investing, if I had the chance."

"It makes one wonder just how long the long-term should be when studying stocks. Even the 5 decades from 1951 to 2003 weren't sufficient to suss out the weakness in the lowest decile of P/B stocks. Might more trouble might be revealed if the numbers are tracked back another 25 years - or followed forward for another 25?"

"At a very deep level, we're all suckers for patterns. The problem is, it's easy to stumble on erroneous patterns in large mounds of data. You can see the result on TV almost every night in the form of new medical breakthroughs. You know, titillating things like the discovery that eating yellow foods decreases the risk of having a heart attack. But after loading up on squash and turning a strange shade of pale, another study might come along that refutes the first and instead points to the cancer causing properties of yellow food. It's a wonder health-conscious people eat anything all. (Rest assured yellow foodies, these examples are fictitious.) The problem being, just because you've spotted a pattern doesn't mean that it's predictive or, in math speak, correlation does not prove causation. All too often what the researcher actually uncovered occurred simply by chance. That doesn't keep our love of predictable patterns from infiltrating the markets in all sorts of unexpected ways."

"I started the method in 2001 in an effort to beat the S&P500 by picking value stocks within the S&P500 itself. Thus far the Stingy Stocks have gained 14.3% annually whereas the S&P500 (as represented by the SPY exchange traded fund) advanced only 2.3% a year over the same period."

"Graham's time-tested strategy for defensive investors gained ground this year and beat the market once again. It also marks the ninth year of the last eleven in which the method has outperformed, which is a mighty fine showing."

"Value investors should be careful when delving too deep for outsized returns. It turns out that the cheapest stocks by one widely used measure are not always the best. This will come as a surprise to investors who like to rely upon price to book value as a key yardstick when making decisions."

"Inflation is the silent killer of retirement dreams. It sneaks in over the years and nibbles away at nest eggs, leaving people poorer than they once thought. How does it do the dastardly deed? By reducing the purchasing power of money over time."

"The global economy made it through 2011 despite Europe's debt problems, high unemployment in the United States and growing worries about China's red-hot housing market. But will 2012 be as forgiving?"

"Over the past several decades, the value breakpoint has averaged 0.72 - stocks that have a P/B below 0.72 have fallen into the value group those with a P/B above this level have not. As it happens, that's quite close to an old value investing rule of thumb that suggests investors buy stocks only when they trade below 66 per cent of their book value. Unfortunately, there aren't many stocks that pass such a stringent test this year. Indeed, the value breakpoint now sits at a P/B of 1. That's not the highest it's been in recent times but it is well above average, which suggests that value investors should be cautious."

"Canadian and U.S. stock markets get equal treatment on the evening news but it's easy to forget just how different they really are. Investors, though, have had the distinction pressed upon them this year, as the S&P/TSX 60 has slid 14.5 per cent, while the Dow Jones industrial average (DJIA) has risen 6.8 per cent in Canadian dollar terms. To see what's going on, you have to look under the hood. Once you do, the gaps between the two indexes loom large."

"Imagine standing at a podium in a lecture hall and being questioned by 100 professors for two hours. It's the stuff of student nightmares. But that's exactly where I found myself when I recently addressed a bevy of professors from the University of Toronto on financial matters."

""Igor! My portfolio needs a boost. Fetch me some high risk stocks", declared Frankenstein. You see, the Doc was in a pickle. Castle costs were way up and heating the drafty halls was just the beginning. His once friendly contractors rebelled and started to demand danger pay to fix the lightning machines. To make matters worse, the price of brains was getting, well, ridiculous. But his financial advisor had a solution. The Doctor could fund his exciting experiments by dialling up the risk level on his portfolio and thereby restore his treasury. While you probably don't have a moat to tend, you're likely familiar with the link between risk and returns. In fact, to many it is the most important rule in investing: The more risk you take, the higher your potential returns. But what if it isn't true? What if, in fact, after a certain point, taking on more risk actually lowers your returns?"

"Do you want a bit more zip from your value stocks? Join me as I explore a combo that might put a little more spice in your portfolio. The secret is combining the thrifty fundamentals of value investing with the price trends of momentum investing"

"I have fond summer memories of rushing through the gates of my local amusement park and riding the roller coasters all day long. Up and down, round and round. It was grand fun. Alas, advancing decrepitude makes riding the metal monsters an exercise in nausea these days. They're almost as bad as the stock markets which are currently providing a wild enough ride of their own. If you're also turning a little green, I've some good news. You can hold placid lower-risk stocks and still achieve market-topping returns."

"I like to find interesting value stocks using stock screens. One of the best screens to follow is Benjamin Graham's Simple Way, and its variants, which I've tracked for many years in both the U.S. and Canada."

"The beach is sparkling in the sun, the water looks inviting, and I'm sitting in front of a computer screen because Mr. Market is once again sliding into depression. But a little panic is invigorating because there are bargains to be had, and I'm on the hunt for a few good dividend stocks."

"Fling open your closets and clear out your basement because it's garage sale time. If all goes well you might be able to shift the contents down the street. In my neighbourhood, you also get the chance to buy sugary pools in flaky cups from the friendly butter-tart lady. But the humble garage sale yields more than sugar-rush-inducing treats. It can offer lessons for stock investors."

"As it happens, this was about an average year for our top stocks. If you had bought equal amounts of the All-Stars and rolled your gains into the new players each year, you'd now be sitting on a 19.1% average annual return over the last six years, not including dividends. By way of comparison, that's more than 12 percentage points higher than the annual return of the S&P/TSX Composite (XIC), which climbed just 6.5% a year over the same period."

"Just like the Canadian team, the U.S. All-Stars combine the best value and growth attributes. It's a one-two punch that helped them advance 19.4% since last year, not including dividends. Meanwhile the S&P 500 (SPY) trailed the All-Stars by 6.5 percentage points but managed a gain of 12.9% over the same period."

"Do you dream of breaking free from cubicleville and visiting far off lands, exploring castles of yore, or sipping your way through wine country? Wouldn't it be grand if your stocks paid for the experience? To help launch your retirement world tour, we've ranked the largest dividend stocks in Canada based on their ability to put cash in your pocketbook. Before we reveal this year's top picks for income investors, let's check out how last year's crop fared. Our stocks have paid big dividends since the spring of 2009, with our A-grade Retirement All-Stars shooting skyward with average gains of 58.3%. That includes non-reinvested dividends which we assumed were spent on pleasurable pursuits."

"I was pleased to talk at The Investment Show where I made the case that novice investors should opt for low-fee balanced funds. I then moved on to more advanced topics including dividend investing and value investing. Here are the slides that were used..."

"Graham's time-tested strategy for defensive investors gained ground this year but, in a rare turn of events, it failed to beat the market. As a result, it has only bested the market in eight out of the last ten years which, as they say, ain't bad."

"'Complexity isn't necessarily a good thing when it comes to picking stocks,' he says. 'The real challenge is sticking to the stocks you like and not getting scared out of them if they don't work out immediately.'"

"I was pleased to talk to the University of Toronto Faculty Association where I made the case that novice investors should opt for low-fee balanced funds. I then discussed more advanced topics in dividends and value investing. Although the session was not recorded, here are the slides that were used..."

"By sticking to companies that have the means to pay high dividend yields, you not only get the added bonus of a regular paycheque from your portfolio (now electronically deposited in your investing account), but studies show that you'll likely enjoy a higher rate of return over the long run than the market typically provides."

"Only a handful of stocks in the S&P/TSX 60 sport good five-year dividend growth records. Even fewer pay dividends that are well supported by earnings. I'll highlight four that pass both tests, and also happen to trade at modest price-to-earnings ratios."

"The flip book helps to highlight a core problem for investors. Namely, the urge to swap out of a good strategy during periods of underperformance which happen frequently and can last for several years. So, be warned. Oh, and also have a little fun with the flip books."

"Our five-year results are similarly stellar. If you had bought equal amounts of the All-Star stocks and rolled your capital gains into the new team each subsequent year, you'd be sitting on a 19% average annual return. By way of comparison, that's more than 14 percentage points higher than the annual return of the S&P/TSX Composite, which sported 4.7% annual gains over the same period. It's been quite the ride, and it got me to reminiscing. Several years ago a former professor of mine came to visit with my performance record in hand. 'Did you know that you've outperformed most mutual funds?' he asked. I didn't. But it was a gratifying observation. That memory prompted me to look up Canada's mutual fund performance over the past five years. It turns out that the Top 200 All-Stars beat every single Canadian equity mutual fund over that period. We topped the best by about 3 percentage points a year and the second best by about 7 percentage points a year. The median Canadian equity fund trailed by 14 percentage points a year."

"It's been a good year for Stingy Stocks. The markets still have a way to go before breaking even from the big bust, but the Stingy Stocks are very close to staging a full recovery thanks to 64.5% gains this year."

"Graham's time-tested strategy for defensive investors beat the market again this year. But that shouldn't come as a big surprise because it's bested the market, often by a wide margin, in eight of the last nine years."

"The market often behaves like a deranged manic-depressive and it was clearly off its meds this year. Just last winter it was in a deep funk, and panicky investors couldn't sell fast enough. Then all of a sudden, the gloom vanished, the market reversed course, and it shot skyward. It's all a bit zany. But how should you deal with such massive market swings? Benjamin Graham had the answer. You should help out manic-depressive investors. Buy when they rush to sell. Sell when they line up to buy."

"Hints of economic recovery are in the air and the U.S. stock market is starting to sparkle. It's true that a host of worries remain, but that hasn't stopped investors from looking beyond the economy's current troubles to the return to normalcy. As a result, stocks are up smartly from their lows. Even better, our highest-ranked stocks from last year provided some handsome returns. These high-grade U.S. stocks gained 24.1%, not including dividends. That's much better than the S&P 500 (SPY), which only climbed 4.2% over the same period."

"After recoveries of 45% or more in major stock markets since the Crash of 2008, investors may well wonder how it is they're still not back to even. There are two reasons. One, broad markets are still below the highs reached before the crash. Two, the arithmetic of loss means a 50% loss followed by a 50% rise does not mean you're back to even."

"I like to use stock screens to find interesting value stocks and Benjamin Graham's Simple Way is one of my favourites. Regrettably, the bear market wasn't kind to the Simple Way over the last year. But I've high hopes that value stocks will stage a sterling comeback."

"Buy-and-hold investing is a crock. That's what many investors are saying these days and, after a bruising bear market, it's not hard to understand why. If only they had sold at the top and bought back at the bottom. Problem is, getting the timing right is much easier said than done."

"As the illustration shows, four of the current 10 "dogs" have yields above 6%: Merck & Co. Inc., Verizon Communications, AT&T Inc. and E I Du Pont de Nemours and Co. Even after massive cuts to their dividends, Pfizer Inc. still yields 4.38% and General Electric Co. 3.24%. Based on current data, Norman Rothery, founder of StingyInvestor.com,would eliminate Alcoa Inc., Bank of America Corp, G. E. and JP Morgan Chase and Co. from the list. They would be replaced with Caterpillar Inc., Chevron, Home Depot Inc. and J&J, after which Rothery's updated list of 10 dogs would sport an average yield of 4.9%. Berkshire Hathaway owns G. E. and Kraft Foods Inc., while Pfizer and Home Depot Inc. are favourites of other prominent value investors. However, Rothery prefers to look farther afield than the Dow."

"The good news is the top income stocks - those rated A - outperformed the Canadian Dividend ETF by 7.1 percentage points and they bested the S&P/TSX Composite ETF by a whopping 15.6 percentage points."

"Ideally, you would have poured money into these funds when markets hit a multi-year low on March 9, but investor timing is notoriously horrible, Rothery said, noting that investors lose between three and five percentage points or more a year from trying to time the market. "They would have been better off, if they're index-oriented, to just stick with an index and go to sleep.""

"Grocery giant Loblaw Cos. Ltd. announced a new dividend reinvestment plan (DRIP) yesterday that allows shareholders to use their dividends to purchase additional shares in the company at a 3% discount, a day after releasing impressive first-quarter profits. Loblaws follows Royal Bank of Canada, which sweetened its DRIP in February by offering a 3% discount and Bank of Montreal which announced a 2% discount."

"The greatest reason for optimism is that stocks are now offering some of the best values in more than a decade. Many quality companies are available at sharp discounts. Second-tier firms are going for a song. Charlie Munger, the U.S. billionaire, says, 'Price is what you pay, value is what you get.' The value indicators I see say that this is the best time to buy since the early 1990s."

"The market crash of the past few months reminds many people of the Great Depression. But we have a bit of different take on things. As Warren Buffett likes to say, you make money by being fearful when others are greedy and greedy when others are fearful. As agonizing as the past year has been, we think we are now in the middle of a tantalizing buying opportunity."

"Warren Buffett famously warned, "unless you can watch your stock holdings decline by 50% without becoming panic-stricken, you should not be in the stock market." Well, U.S. stocks are down nearly 50% in one of the worst bear markets ever. It's hard not to be a little panicky. But take a deep breath because there is reason to hope."

"I staggered into this December's CFA conference on Equity Research and Valuation Techniques in desperate need of a tonic. The great crash was in full swing and once-mighty companies had crumbled under the mountainous weight of dodgy debts. Here's what some of the leading lights of the industry had to say about these troubled times."

"Over the past eight years I've used my take on Benjamin Graham's time-tested strategy for defensive investors to uncover undervalued U.S. stocks. I'm pleased to say that the overall results have been superb. Over the last year we handily beat the index. But even our 16.8 percentage point outperformance wasn't enough to turn a profit in what is shaping up to be a whopper of a bear market."

"What constitutes a sin stock? The answer is very much in the eye of the beholder. Tobacco, gambling and defence companies are routinely condemned by the socially responsible crowd. You might want to add various Wall-Street financial firms to the list of the damned given their recent antics."

"Remember, when dealing with Mr. Market, fear is the cost of getting a good price. It looks very grim out there and it might get worse. But stock prices will reach their lowest when uncertainty reigns and expectations are at their lowest. Investors are currently very fearful and we think that it's time to get greedy."

"Do you dream of relaxing on a sunny beach, drink in hand, while your investment portfolio throws off piles of cash? That's the life of an income investor. To help you get to that beach as quickly as possible, we have once again ranked the biggest trusts and stocks in Canada based on their ability to put steady streams of cash into your wallet."

"Advisors using actively managed funds have taken a beating from index-fund advisors in the popular press over the issue of fees. But the argument for indexing is usually made by relying on raw index returns and usually targets investors who don't want advice. The case for indexing is substantially weaker when all of the costs associated with advice on passive portfolios are added up."

"For most of us, picking stocks is as tricky as ordering a seven-course dinner at a swanky new restaurant. Lots of items on the menu sound appetizing, but that's where our knowledge ends. Rather than simply point and hope, smart diners look for an expert opinion on the restaurant's offerings. To provide smart investors with a similar scouting report, we're pleased to present you with our candid take on all of Canada's largest stocks. We've worked hard to produce a rating system that's easy to use, logical, and appealing to all types of investors. We think the Top 200 provides you with a more objective look at large Canadian stocks than you're likely to find from any other single source. If you're looking for a sensible take on any large Canadian stock, you'll find the Top 200 to be an invaluable way to generate promising investment ideas."

"Frugal investors are often attracted to index and exchange traded funds because they offer a simple way to buy a diversified stock portfolio at a low cost. But there are other options for thrifty individuals who want to take a more active approach. I explored the money-saving possibilities of buying stocks held by index funds instead of the index funds themselves in the May 2008 edition of the Canadian MoneySaver. This month, I'll investigate a similar method for active funds where the potential savings can be much higher."

"In the latest Wealthy Boomer video interview -- which went up today -- Norman Rothery of The Rothery Report comes to an interesting conclusion about online trading and $10 commissions (or $9.95, which amounts to the same thing.) With a full-service brokerage, exchange-traded funds (ETFs) are a convenient way to get access to multiple stocks with a single trade. But once you move from commissions in the multiple hundreds of dollars to $10 a trade, suddenly it becomes cost-effective for individual investors to buy each component stock in an index, or cherry-pick the better ones."

"There's no free lunch, even when investing on your own without an adviser. You still pay commissions to buy company shares, exchange-traded funds and income trust units. But you can get a free dessert (so to speak) if you reinvest the dividends to buy more shares, ETFs and trust units."

"Norm Rothery, chief investment strategist at Windsor, Ont.-based investment research and counselling firm Dan Hallett & Associates Inc., recommends investors avoid value traps by using a nine-point system developed by Joseph Piotroski, professor of accounting at Stanford University. According to his system, returns on assets and cash flow from operations should be positive. Also, there should be momentum in fundamentals: For example, gross margins and debt should be changing for the better. Still, it's inevitable even the best of the value practitioners will stumble into value traps on occasion."

"It is easy to get a simple, low fee, and broadly diversified portfolio with ETFs. Most investors can safely stop here. But perhaps I can entice you to read on about a few specialized situations. When it comes to ETFs I like to consider two options for long-term investors. The first option is to purchase the ETF and hold on. The second option is to bypass the ETF and buy the stocks that it owns. At first glance, the choice between buying a low-cost exchange-traded fund that holds many stocks or buying each individual stock appears to be obvious. The exchange-traded fund is likely to be the better bargain. However, buying stocks directly may be a good choice for some investors because the Canadian stock market is very small and it is dominated by a few big names. By holding only a few stocks you can reasonably approximate, or even fully replicate, some ETFs."

"Thanks to The Rothery Report's Norman Rothery - with whom I had the pleasure of dining this week - I came across a copy of a book that is focused on the topic of economic moats. It's called The Little Book That Builds Wealth (Wiley, 2008), by Pat Dorsey, who is the director of equity research at Morningstar Inc. Morningstar is famous for its mutual fund ratings, but also rates individual stocks using an 'economic moat' rating system. The book divulges most of its approach to this system and makes for a fascinating read."

"Your next stop is the Stingy Investor website. (Go to www.ndir.com and search for Canadian discount brokers). It's run by Norm Rothery, chief investment strategist at Dan Hallett & Associates Inc. Here you can find up-to-date comparisons of the fees and commissions charged by 15 Canadian online brokerages (as well as phone numbers and email addresses). What you pay usually depends on how many trades you make per quarter or year, how many shares you buy at a time and how many dollars you have in assets at the firm."

"Benjamin Graham, the father of modern security analysis, was a professor at Columbia University, taught Warren Buffett and wrote the most famous -- and arguably the best -- book on investing, The Intelligent Investor, first published in 1949. In a chapter on stock selection for defensive investors, he said they should look for large, dividend-paying companies with little debt and a consistent record of profitability, whose shares trade at low multiples to earnings and book value. We applied Graham's criteria to the Canadian market, using the FP Corporate Analyzer program to identify companies Graham would likely find attractive."

"Individual investors continue to flock to online investing as a low-cost alternative to full-service brokerage accounts. As of December, 2007, Canadians had $179-billion invested in online or discount brokerage accounts, according to Investor Economics Inc. That's no trivial amount, although it's still dwarfed by the $720-billion stashed in full-service accounts, says senior consultant Guy Armstrong. "We're still predominantly an advice-oriented society.""

"Each December I grade the largest stocks in Canada for the MoneySense Top 200 ranking. But, as a personal project, I've also been grading Canada's smaller stocks at the same time, using the same methodology. The result? Over the past three years the top small stocks have actually done better than their larger counterparts in the Top 200. In 2004 the top small stocks gained 54.8%. In 2005 the tiny superstars climbed 44.6%. In 2006 the pint-sized overachievers advanced a further 18.3%. If you had bought the top-rated top small stocks in 2004 and rolled your gains into the new bunch each subsequent year, you would now be up 170%, not including dividends. That compares to a gain of about 152% for the top-rated stocks in the Top 200."

"Looking for a steady cash flow? We've rated the best Canadian stocks and trusts for income investors. We've assessed 100 income trusts and 100 income-generating stocks for their ability to provide generous income for a reasonable price. The top firms get an A; good ones land a B. Our grades are based on market capitalization, yield (how much they pay out), reliability (how safe is the payout), and value (lots of assets at a low price). Use our grades as a starting point for your own research. Like any investment screen, the Income 100 is intended to help you hit upon a few good ideas that may deserve a place in your investment portfolio."

"This is the fourth annual MoneySense Top 200 and we are pleased to say that connoisseurs have dined out very well on our past reviews. In each previous edition, we picked what we call All-Around All-Stars - stocks that score well on both our growth and value tests. Our All-Stars have consistently produced double-digit returns. The 2006 team achieved average returns of 16%, while the 2005 All-Stars gained 38%, and the 2004 squad soared an amazing 58%. An RRSP investor who put $10,000 into the 2004 picks and rolled his or her gains into the new All-Star team each subsequent year would now have $25,200. And those results don't include the generous dividends that we picked up along the way."

"Over the past seven years I've used my take on Benjamin Graham's time-tested strategy for defensive investors to uncover undervalued U.S. stocks. I'm pleased to say that the overall results have been stellar and last year's numbers were outstanding. The performance of each year's Graham stocks, the performance of the S&P500 (as tracked by the SPY exchange-traded fund), and the difference between the two is shown in Table 1. You can see that the Graham stocks have beaten the S&P500 in six of the last seven years and often by a substantial margin. An investor who bought each year's Graham stocks, sold, and then bought the next crop of stocks would have gained 507% (or 32% annually**) whereas a buy and hold investment in SPY units would have gained only 22%."

"I bought into Fairfax Financial when it was hit by a tsunami of bad news in 2002. Short sellers were betting it would collapse - which is one reason I thought it was a buy. I like beaten-down stocks because I'm a contrarian and a value investor. I think that desperate situations such as Fairfax in 2002 are the ones that hold the potential for the biggest profits. Most people, though, hesitate to wager a big chunk of their hard-earned money on distressed stocks - and for understandable reasons. One problem with investing in companies like Fairfax is that you may have to wait years to see a profit. Another problem with deep-value investing is that it's not at all unusual to buy into a beaten-down firm, then watch it get even more beaten up. This can be deeply stressful. A good way to sidestep these problems is to marry the frugality of value investing with the price action of momentum investing. You buy cheap stocks, but only after their prices have rebounded. By looking for stocks with a bit of price momentum, you are waiting for the market to signal that the worst is over for the firm."

"Some extraordinary qualities are needed to make our list of top stocks. On the value front, all our chosen stocks pay a dividend and sell for modest price-to-sales and price-to-book-value ratios. On the growth side, they demonstrate strong increases in sales per share and earnings per share. In addition, most generate healthy returns on equity, carry relatively little debt, and enjoy rising share prices. Keep in mind, though, that these stocks are controversial. After all, strong growth is rarely to be had at rock-bottom prices without some risk."

"Index funds are increasingly popular with savvy investors seeking low-cost diversified portfolios. As an added bonus, they often outperform many mutual funds. Indeed, Warren Buffett said in his 1993 annual letter to shareholders, 'By periodically investing in an index fund, for example, the know-nothing investor can actually out-perform most investment professionals.' But there is an astonishingly easy way to beat the index at its own game. It turns out that indexes are too active. That is, they tend to buy and sell stocks too frequently which puts a damper on their performance."

"Warren Buffett's insurance company GEICO is currently running a series of humorous ads featuring the line, 'So easy even a caveman can do it'. In a curious twist of fate, Buffett's mentor Benjamin Graham developed a way to pick stocks that even cavemen would appreciate. Graham described his Simple Way in a 1976 article called The Simplest Way to Select Bargain Stocks that can be found in Janet Lowe's book The Rediscovered Benjamin Graham. Given its recent success, these days stock-picking cavemen are dining out on mammoth steak."

"Value investing is so easy that your grandfather can do it - that is, if he follows the advice of Ben Graham, the grandfather of value investing. Back in 1976, Graham, a Wall Street financier and Columbia University professor, developed what he called The Simplest Way to Select Bargain Stocks. Investors who followed his approach have been riding the gravy train ever since."

"A year ago we helped you target Canada's best income trusts in our second All-Canadian Trust Guide. We ranked the largest trusts in Canada and assigned each a letter grade depending upon how its financial numbers stacked up. Despite the carnage in the trust sector as a result of new tax rules introduced in late 2006, our picks hit the bulls-eye. Our top-flight trusts - those rated either A or B - gained an average of 11.7% over the past year. That continues a streak of strong performance. Since we started ranking trusts in 2005, our top trusts have gained a total of 44.9%."

"Many of us would love to become landlords - if it just weren't for those darn tenants. Every prospective landlord hears stories about deadbeat tenants who skip town without paying the rent. And even if you have good tenants, the life of a property entrepreneur isn't easy. Nothing takes the shine off a potential investment faster than the thought of fielding complaints at two in the morning about clogged toilets or devoting part of your weekend to fixing the broken-down washing machine at your rental property. Fortunately, there is an easier way to become the next Donald Trump. Rather than buying rental units directly, why not invest in property through Real Estate Investment Trusts?"

"I like to hunt for U.S. value stocks using Benjamin Graham's criteria for defensive investors. The method focuses on solid companies trading at modest prices. You can read all about it in Graham's book The Intelligent Investor which deserves a spot on every investor's bookshelf. But I'm often asked for Canadian stocks that pass Graham's test. This month I've found five candidates that the master might like."

"Investors love profits - the bigger the better. But when evaluating potential stock buys, it's important to consider more than just how much a company earns. You should also take a gander at what it owns. You can often spot valuable opportunities when you find solid assets selling for low prices. One way I like to look for bargains is by examining a company's book value. This is the historical value of all its assets minus its liabilities. The price-to-book-value ratio (P/B) that you see quoted on many financial websites compares this book value to the current price of the company's shares. If you buy stocks with low P/Bs, you're buying assets at a bargain price."

"Since a rocky start in 2001, the stingy stocks have provided a total gain of 183.6% assuming that the old stocks were sold and the new stocks purchased each year. In comparison, the S&P500 (as represented by the SPY exchange-traded fund) lagged by 151.3 percentage points over the same period."

"Want to go hunting for buried treasure? Then join us as we once again dig up the shiniest prospects among Canada's largest 200 stocks in the third annual MoneySense Top 200. We're pleased to say that the first two versions of the Top 200 have been a great success. Look, for instance, at our All-Around All-Stars from last year. These were the handful of stocks that scored well for both good value and good growth prospects. Since we selected them in November 2005, they have gone up in price by an average of 37.6%. Fold in the 57.6% return from the 2004 version of the All-Around All-Stars and our top picks are up 116.8% over the past two years. Yes, you heard that right. Someone who invested in our All-Around All-Stars from 2004 then rolled their gains into our top picks from 2005 would have more than doubled their money in two years - and their 116.8% gain doesn't even include the dividends they would have collected along the way."

"Over the past six years I've used Benjamin Graham's time-tested strategy for defensive investors to uncover undervalued U.S. stocks. Overall the results have been stellar but last year the method hit a speed bump and posted a small loss."

"If you're intrigued by the results of our Top 200 listing of Canada's largest stocks, you may be interested in extending your search for good investments beyond Canada's borders. If so, we invite you to join us as we embark on a road trip through the largest 500 stocks in the U.S. Our goal? To find tomorrow's stars today."

"Want to invest like a master? Then look to the works of Warren Buffett, Peter Lynch, David Dreman, and James O'Shaughnessy. These four gentlemen are all great investors, and all of them have either written books on how to invest or, in Buffett's case, produced years of informative shareholder letters. Remarkably, none are shy about sharing their market-beating techniques. In this feature, we examine how each of these wizards thinks and we spell out what each looks for in a stock. But that's just for starters. We've also scoured the markets for stocks that our famous investors might be interested in buying right now."

"Replay history: We've mentioned this calculator before and we'll do so again it's a wonderful way to see how different investment strategies would have fared over the years. You select a portfolio composed of up to six major asset types, then pick start and end dates. The calculator tells you how much you would have made or lost. Our take: A great way to try out various approaches to investing without betting a dime of real money. You may be surprised at the volatility of even the best-balanced portfolio."

"I suggest taking a tip from Benjamin Graham, the legendary Wall Street financier and Columbia University professor who taught Warren Buffett about investing. Graham devised many techniques for identifying undervalued companies, but particularly remarkable is the record of his Simple Way formula, which he outlined in a 1976 article called The Simplest Way to Select Bargain Stocks. Despite its utter lack of complexity, this recipe has been a smashing success. I highlighted the Simple Way to MoneySense readers in early 2004 and I provided an update in 2005. I'm pleased to report that both batches of Simple Way stocks have performed superbly, gaining an average of 45.2% in less than 32 months, not including dividends. Over the same period the S&P500 was up only 16.3%."

"The long-term risk-averse investor should consider three factors when selecting stocks with Share Purchase Plans (SPPs). First, they should demand a low price. Second, they should require earnings stability. Finally, investors should look for modest, but not necessarily spectacular, earnings growth."

"Benjamin Graham is often called the father of value investing and during his lifetime provided the world a variety of useful stock-selection techniques. Remarkably, some of his simplest methods have continued to outperform long after his passing. Although many of Graham's methods are easily described, their continued success relies on the fact that they can be psychologically hard to put into practice. Very few people truly have the temperament to be value investors and while it's relatively easy to find value stocks holding them is the real test. Value stocks usually become inexpensive for a variety of unappealing reasons. As a result, even when value stocks are identified, relatively few investors want to buy them. Even worse, a few value stocks inevitable do badly and decline as their business weakens which tends to scare off investors."

"A year ago we decided to guide our readers through the murky world of income trusts. To shed some light on the subject, we ranked 100 of the largest income trusts in our first annual All-Canadian Trust Guide. We used entirely objective criteria and assigned each trust an A, B, C, D or F grade depending upon how its numbers stacked up. We figured that our top-rated trusts might provide you with a few good starting points for your own research. We're pleased to say that our humble efforts yielded solid returns. Our top-of-the-class trusts - those rated either A or B - gained an average of 29.7% (and that's without reinvesting distributions) since we did our ranking. We think most investors would be delighted with nearly a 30% annual return."

"There's nothing like cashing your first dividend cheque to develop your taste for raw capitalism. That's when it hits you that simply by buying a share in a firm you can enjoy a perpetual stream of dividend income with no further sweat or toil. But dividends are only the most obvious way that companies reward shareholders. You can also reap big benefits when companies decide to buy back their own stock."

"It also nicely illustrates why most main street investors should avoid IPOs entirely. Regular investors rarely get quality IPO shares before public trading begins. On the other hand, buying at sky-high prices when trading starts can set up long-term investors for a big fall."

"Can an active fund that charges ten times as much as an index fund be expected to outperform the index fund? The case could be made in extraordinary circumstances, but it might be more fruitful to see if index funds themselves could be made even better. Interestingly those clever monkeys might have had the answer all along."

"I like to look through lists of beaten down stocks for good bargains. Naturally, I don't expect to find a good value every time but there are often a few candidates that make the search worthwhile. During a recent search I was pleasantly surprised to spot several gleaming brand names languishing unloved in the bargain bin."

"I like to begin each year by hunting for dividend income with the Dogs of the Dow and the Dogs of the TSX. Both versions of the time-honored Dogs strategy start from the simple premise that blue-chip stocks are too big to fail. The theory goes that if you can buy these stocks when they're in the doghouse and temporarily cheap, you can benefit from their juicy dividend yields and maybe even cash in on some capital gains as their share price recovers."

"After the collapse of the Internet bubble many investors turned to the relative safety of dividend income. At the risk of being labeled a "gloomy Gus", I have to point out that dividends aren't 100% safe. The intrepid dividend investor must be on the constant lookout for dividend cuts, inflation and high prices."

"This year we've expanded our successful stock selection method to cover 1,000 of the largest stocks in the U.S. We've focused only on the very best stocks and moved our giant Top 1,000 U.S. Stocks table online with all the detailed information that you've come to expect from the Top 200."

"If you're looking to pick up a few good value stocks, Benjamin Graham's Simple Way will tickle your fancy. Graham, who taught Warren Buffett, was the father of value investing. The system he outlined in his 1976 article, "The Simplest Way to Select Bargain Stocks" has since become a staple of savvy investors."

"The long-term risk-averse investor should consider three factors when selecting stocks with Share Purchase Plans (SPP). First, they should demand a low price. Second, they should require earnings stability. Finally, investors should look for modest, but not necessarily spectacular, earnings growth. I've used these three criteria to find interesting stocks for Canadian MoneySaver readers in 2001 and 2003. In this article, I take a look at the performance of my past picks and provide a new list of SPP stocks to consider."

"Benjamin Graham is often called the father of value investing and during his lifetime provided the world a variety of useful stock-selection techniques. Remarkably, some of his simplest methods have continued to outperform long after his passing. Although many of Graham's methods are easily described, their continued success relies on the fact that they can be psychologically hard to put into practice."

"A key premise of value investing is that markets usually overreact to negative news, pushing stocks below their true value as the herd mentality takes hold. That's when value investors swoop in and pick up shares at a hefty discount. To be successful, a strong contrarian streak is essential. Having loads of patience is also important, because the market often takes years to recognize the value it's been overlooking. And during that time, a stock can give investors fits. "Most people probably can't be value investors because they don't have the temperament for it. They'll buy a few stocks and then they'll get spooked out of them and sell," says Norm Rothery, founder of StingyInvestor.com and a financial consultant with Dan Hallett and Associates Inc."

"While discussing Graham's method for defensive investors, many people asked me how Graham went about selling such stocks. Regrettably, Graham didn't provide a clear selling strategy, but there are a few simple approaches that investors can use."

"Want proof? It turns out that 1999 was the worst year on record for the Dogs of the TSX. David Stanley, University of Guelph professor emeritus, tracks the Dogs of the TSX and rebalances his portfolio each year on May 25. Stanley calculates that the Dogs have gained an average of 13% a year since 1987, trouncing the index by 3.6 percentage points a year."

"Many investors suffer from procrastination and leave their RRSP decisions to the last possible moment. If you're part of this group then I'm right there with you. Although I don't leave things to the last possible moment, I have been known to top up my RRSP with only a few days to spare."

"I look for two qualities when searching for qbargain stocks; they must be cheap and they must be safe. Not surprisingly, it is often difficult to find stocks that are both cheap and safe. Indeed, the popularity of value investing has increased and good deals are becoming rare."

"Over the past four years I've used Benjamin Graham's time-tested strategy for defensive investors to uncover undervalued U.S. stocks. In many ways my series on Graham stocks was well timed because, after years of underperformance in the late 1990s, value stocks staged a strong comeback in the early 2000s. Graham's approach has certainly benefited from changed market sentiment and I'm happy to report another year of stellar returns."

"Our Top 200 caters to both the value and growth camps. We began by finding Canada's 200 largest companies on the basis of revenue. Using data supplied from the Thomson Baseline database, we then evaluated each of these big firms using two screens - one to test its attractiveness as a value investment; the other to evaluate its appeal as a growth investment."

"When you find a dollar on the sidewalk, do you pick it up? I bet you do. After all, free money doesn't come along every day. What you may not know is that the stock market also offers up cheap money from time to time. You just have to learn how to spot it."

"Consider two options for the truly long-term index investor. The first option is to purchase an iUnit ETF and the second option is to buy the index's stocks directly. At first glance, the choice between buying a low-cost exchange-traded fund that holds many stocks or buying each of the stocks directly appears to be obvious. The exchange-traded fund is likely to be the better bargain. However, buying the stocks directly may be better for some investors because the Canadian stock market is very small and it is dominated by a few big names. As a result, one might reasonably approximate an index fund by holding only a few stocks."

"From 1970 to 2003 the top-yielding stocks outperformed the average stock by 1.9 percentage points a year. Their superiority was even higher if you looked at just the period between 1984 to 2003, when they showed an average annual advantage of 2.1 percentage points. And it was higher still if you focused on 1994 to 2003, when high-yield stocks beat the average stock by an average 2.2 percentage points a year."

Over the last three years I've highlighted Benjamin Graham's time-tested strategy for defensive investors in an effort to uncover undervalued U.S. stocks. Based on the relative success of the method, many people have asked me to apply the approach to the Canadian markets.

"Benjamin Graham, the father of value investing, developed some of the earliest and most successful techniques for selecting stocks. Despite all the changes in the financial world since Graham's heyday on Wall Street in the 1930s, '40s and '50s, some of his simplest methods have continued to perform unusually well."

Income-oriented investors have recently been put between a low-interest rate rock and a risky-stock hard place. Long-term government bonds yield little real income which has pushed investors into the stock market in search of healthy dividends. Regrettably, dividends are much less certain than interest and income-oriented investors should keep a close eye on dividend stocks for signs of weakness. Fortunately, there are several ways to tell if a stock's dividend is potentially at risk.

"At the start of each year I search through the S&P500 in an effort to uncover a few thrifty value stocks. Aside from sticking to large companies, I also look for inexpensive yet profitable businesses with little debt. So far, the results have been quite gratifying."

Over the past three years, I've used Benjamin Graham's time-tested strategy for defensive investors to uncover undervalued stocks. So far, the results have been extraordinary with significant gains each year.

"The once mighty dividend isn't what it used to be. Although dividends have regained some popularity, they remain largely supplanted by share buybacks with nearly half of all corporate distributions going to repurchase shares. Like dividends, buybacks represent a return of shareholders' equity but they have their own unique characteristics."

"Watered stock is an old fashioned term that describes shares of companies with drastically overvalued assets. Reportedly, the term originates with the practice of ranchers feeding their cattle large amounts of water before going to market where the water-induced weight would fetch a higher price. Naturally, the buyer is not happy with this process. The crafty promoter can't take a stock to the pond for a fill up, but there are a variety of ways to mark up assets. A potential source of asset inflation is goodwill, which can be uncovered by investors who are willing to do a little work."

"The long-term, risk-adverse investor should consider three factors when selecting stocks with a Share Purchase Plan (SPP). First, they should demand a low price. Second, earnings stability is desirable because most investors sleep better at night when they own stock of steady companies. Finally, investors should look for modest, but not necessarily spectacular, earnings growth."

There is no reason to make rushed decisions when it comes to your RRSP. To avoid last minute RRSP pressure simply follow the RRSP three step; buy short-term debt, consult your investment policy, and wait to buy the right securities for your portfolio. You may have to hurry to make this year's RRSP contribution but you should take the time to find great investments.

Last year I attempted to achieve success by hand picking twelve value stocks from the S&P500. Well, I managed to avoid the success part. My twelve picks lost an average of 1.92% from December 5, 2001 to December 5, 2002. Mind you, this was much better than the S&P500 which fell by 22.12% over the same period. Normally outperforming the index by 20.20% would be cause for celebration but a loss is still a loss.

Dividends are making a big comeback with investors and it's not hard to see why. Many blue-chip stocks are now paying more than GICs, government bonds or high-interest savings accounts. The tax advantages of Canadian dividends makes them even more attractive.

December is filled with family, friends, and, for investors, the dreams of healthy dividends. In what has become a December tradition, I look at Benjamin Graham's strategy for defensive investors using the MSN.com stock screener. Long-time Canadian MoneySaver readers will note that this is the third time I've discussed Graham's conservative technique.

Growth is what it's all about for investors. Every investor wants to see their portfolio grow and many attempt to generate wealth by buying growth companies. At first glance, it seems to be a simple matter to buy companies that have grown the most and, therefore, are likely to continue growing. Regrettably, as with many simple investment concepts, selecting growth stocks is fraught with difficulty.

"The September issue of the Canadian MoneySaver contained an avalanche of articles that encouraged investors to time the market. These interesting approaches sparked my memory. I recently had the pleasure of reading Charles Ellis' book Classics: An Investor's Anthology which contains Robert Jeffrey's article The Folly of Stock Market Timing. The article included a startling figure showing the impact of market timing based on a simple strategy. I've updated his analysis in order to provide a cautionary tale to potential market timers."

Robert Kirby thought that investors would be well served by purchasing small amounts of many stocks and then forgetting about them for ten years. While discussing his investment counsel business he related an interesting anecdote...

"Investors seeking income often buy stocks that pay a healthy dividend. Canadian dividends are taxed more favorably than interest from GICs but dividends may be reduced and the initial investment is not guaranteed. Dividend investors employ a variety of popular approaches to pick stocks including dividend growth, relative dividend yield and the Dogs of the Dow. In this article I focus on the Dogs of the Dow which is wildly popular in both Canada and the U.S. but has its flaws."

Last December I reviewed the MSN.com stock screener and found nine stocks that fit Benjamin Graham's guidelines for defensive investors. In this article I look at how these stocks have performed and provide this year's list of candidates.

I was recently asked by Jonathan Chevreau to make a few suggestions on what, given the times, should be done with a $10,000 windfall. An interesting question that is difficult to answer. Nonetheless, in this article I offer a few suggestions and take a look at the vexing choice between spending today and saving for tomorrow.

Disclaimers: Consult with a qualified investment advisor before
trading. Past performance is a poor indicator of future performance.
The information on this site, and in its related newsletters, is not
intended to be, nor does it constitute, investment advice or
recommendations. The information on this site is in no way guaranteed
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